AT&T will start selling you cable TV over the Internet

AT&T is going "over the top" with television.

In the fourth quarter of this year, AT&T will start selling cable-like bundles of TV to people across the country through a new app. Subscribers won't need an AT&T wireless phone or an AT&T broadband connection at home.

It'll be like Netflix -- download the app, sign up, type in a credit card number, and start streaming a TV show.

"It is an Internet-delivered service," AT&T Entertainment Group CEO John Stankey said in a phone interview.

The potential ramifications are wide-ranging. The new service, which will have DirecTV branding but without the need for a satellite dish, will create new competition in the television industry.

AT&T(T) says it will still sell satellite dish service through DirecTV and fiber-optic TV service through U-verse.

But this BYOB -- bring your own broadband -- offering is a big step forward. One of AT&T's smaller rivals, Dish Network(DISH), already sells a similar streaming service called Sling TV.

Stankey said its "DirecTV Now" service will be different: While Sling TV is a "skinny bundle," with just a few dozen channels, "these bundles are going to look much more like" the hundreds of channels that most people already get at home.

So why is this a big deal? Because "DirecTV Now" promises to make a cable TV subscription more portable and convenient -- and perhaps more directly competitive with Netflix(NFLX).

AT&T says it will solve problems that beguile viewers, like the requirement to log in to web sites and apps to access a cable subscription.

The "DirecTV Now" bundle will be oriented toward live scheduled programming, the same way existing TV on-screen guides work.

But one of the other bundles, "DirecTV Mobile," will be oriented toward on-demand programming, more like Netflix and Hulu, which is a big shift for the industry.

This lower-cost plan will be just for smart phones, while "DirecTV Now" will work on big-screen TVs too.

A third offering, "DirecTV Preview," won't require a monthly subscription at all. It will be a free app with a smaller selection of shows, perhaps intended to persuade people to pay for the bigger bundles.